About the Energy Rating Program

Background

Household appliances are a major source of electricity consumption and greenhouse gas emissions, accounting for 40% of residential greenhouse gas emissions in Australia and 41% of household electricity consumption in New Zealand.

While many of the appliances currently on the market are quite efficient, there are also many that could be substantially improved. Energy rating labelling is a program which aims to create market demand for efficient products through the provision of clear and objective information on energy efficiency to consumers.

The aim of the energy rating labelling program is to:

Encourage consumers to select the appliance that uses the least energy and which meets their energy service needs.

Enable consumers to understand the approximate running costs of an appliance before buying and to minimise the total life cycle cost of the appliance where possible [Energy Use in the Australian Residential Sector 1986 – 2020 – Department of Environment, Water, Heritage and the Arts (DEWHA), 2008].

Provide incentives for manufacturers and importers to improve the energy efficiency of the products they supply to the market.

Why energy rating labelling?

Improving product energy efficiency has significant environmental and economic benefits and energy rating labelling is one of the mechanisms that can help achieve this. Because labelling gives product energy performance information at point-of-sale, it can increase consumer awareness and demand for energy efficient appliances, and also encourage manufacturers to respond to that market demand.

Energy rating labels give consumers the objective information they need to factor energy efficiency into their product purchasing decisions – information that is often not declared voluntarily by manufacturers. Manufacturers of products covered by the labelling programme are required to supply and declare energy data as specified under the relevant Australia/New Zealand Standard, which then appears on the product’s label.

Energy rating labelling often works hand-in-hand with a mechanism called Minimum Energy Performance Standards (MEPS). MEPS establish standards for energy performance that products must meet or exceed before they can be sold to consumers. It improves the average efficiency of products available on the market and raises the performance of the least efficient products. It also ensures consumers have access to a more efficient range of products, creating significant energy and greenhouse gas savings at a household and national level.

How energy rating labelling began

Energy rating labelling for major appliances in Australia was first proposed in the late 1970s by the state governments in New South Wales and Victoria. When raised with the appliance industry in 1982, there was considerable resistance on two grounds:

Any program should be uniform nationally rather than risk different state approaches.

It should be voluntary rather than mandatory.

Although several states commenced mandatory labelling in the mid 1980s, it was not until 1992 that a mandatory national labelling scheme was finally agreed, and legislation in the last state and territory was not passed until 2000.

Australia has one of the oldest energy rating labelling programs in existence. Only the Canadian (1978) and the US (1979/1980) schemes pre-date the Australian system.

New Zealand introduced regulations for energy labelling in 2002 and entered into a joint program with Australia in 2005.

From 1 October 2012, Australia has had national Greenhouse and Minimum Standards (GEMS) legislation, replacing the patchwork of state regulations that have covered MEPS and labelling of products to date. New Zealand will continue their involvement through a memorandum of understanding with the Australian Government.

How much energy is used by appliances in households?

With more than 8 million households in 2010 and a high standard of living, Australia’s residential energy consumption is high and growing. A large proportion of our household energy needs are met with electricity, which for most of Australia is generated by burning fossil fuels. This means significant greenhouse gas emissions are attributable to the residential sector.

Residential energy consumption in 2008 was about 400 petajoules for all fuel types [Energy Use in the Australian Residential Sector 1986 – 2020 – Department of Environment, Water, Heritage and the Arts (DEWHA), 2008].

New Zealand’s 1.58 million households account for an estimated 13% of the total energy demand in New Zealand and about 10 percent of energy related emissions (4% of total emissions). Refrigerators and whiteware appliances account for 20% of the household’s electricity use, while TVs and home entertainment appliances uses up to 10 – 15% and space heating uses 12%. Heat pumps (reverse cycle air conditioners) are used in 21% of New Zealand households.

The following figure and alternative presentation as a data table provides a breakdown of energy use in Australia’s residential sector (Note: New Zealand information is available from the energy end use database):

Residential Energy Use by appliance in 2007

Usage type

Energy Use (PJ)

% of the total

Space Cooling

11.9

3%

Space Heating

149.6

38%

Appliances

124.9

31%

Water Heating

90.7

23%

Cooking

19.6

5%

Program Achievements

Energy consumed by appliances and equipment is a major source of greenhouse gas emissions in Australia. Improving the energy efficiency of appliances is a key objective for all Australian Governments.

The main policy tools that are used to improve the energy efficiency of appliances and equipment, in the residential, commercial and industrial sector, and save money for all Australians, are mandatory Minimum Energy Performance Standards (MEPS) and mandatory Energy Rating Labels.

Since 1986 the Energy Rating Label has appeared on refrigerators and freezers in New South Wales and Victoria. Since that time, the label has applied to more product lines and is used in both Australia and New Zealand, with all states and territories having regulations in place over time.

In 1992 a national body, the Equipment Energy Efficiency Program (E3) was established to coordinate these activities, and in October 2012, the national Greenhouse and Energy Minimum Standards (GEMS) scheme commenced. The E3 Program operates under this national legislation, replacing the patchwork of state regulations the E3 Program had been operating under to up to 2012.

The Program is administered by the Australian Government (currently through the Department of Industry and Science), with continued input from state and territory governments and the New Zealand Government (through the Energy Efficiency Conservation Authority).

E3 reports to the Energy Efficiency Working Group (E2WG) under the National Framework for Energy Efficiency (NFEE), and ultimately to the Select Council on Climate Change. More recently the work of E3 has been adopted as a measure under the National Strategy on Energy Efficiency and the National Partnership Agreement on Energy Efficiency.

Products are considered for inclusion within the program on the basis that the community will benefit from their regulation. The individual product energy efficiency target is either the equivalent of world-best regulatory target or a more stringent level developed specifically for Australia. This market intervention has proved to be an extremely cost effective mechanism for reducing energy demand and greenhouse gases produced by consumer appliances, commercial and industrial equipment.